Who is the front runner in streaming?
While Nielsen’s “Tops of 2020” report highlighted Netflix’s lead in the original and acquired television series, one relative newcomer is causing a stir on the streaming movie front: Disney.
Nielsen said that seven of the top ten most streamed films of the past year were seen on Disney +, which launched in November 2019.
Overall viewership has changed slightly, according to the research firm, with Netflix consuming just 28% of streaming time – up from 31% in 2019 – and Disney accounting for + 6%.
“There is room for both of them in the industry because their” prices are not extreme, “said Quint Tatro, founder and chief investment officer of Joule Financial.
“I have three children. We are not canceling either,” he told CNBC’s “Trading Nation” on Wednesday. “It’s a rating question from an investment standpoint. And I just can’t touch Netflix here.”
Netflix’s nearly 3% rise on Wednesday brought the stock to nearly 86 times the price / earnings ratio, and with debt 1.5 times its equity “it’s just not an attractive game,” Tatro said.
“If we’ve had a significant drop in that name where all of a sudden everyone was like, ‘Oh, they’re dead’ – let’s say there was a new player in the game or something – maybe you can pick stocks, but it’s just no touch for me, “said Tatro.
While Disney didn’t initially get the recognition it deserved for Disney +, the stock made an “incredible comeback” from its March lows, Tatro added.
“We own the stock. We have been rewarded for holding the stock. We bought near the March lows. I’m very happy with all of this,” he said.
But since Disney is trading with 40 times the profit from Wednesday, “this has to happen,” said Tatro. “So, I think there is room for both. … In the longer term, I think Disney is the play because they have more than just the streaming, but you have to be patient. The next fix is on the shopping list. Then you get it Shares off. “
TradingAnalysis.com founder Todd Gordon agreed that it is possible to have the best of both worlds. Investing in streaming doesn’t have to be an “either-or” strategy.
Still, Disney stocks have shown remarkable momentum over the past year, Gordon said, referring to a chart.
“Could you imagine placing a bet on the lows of Covid knowing that the country was going to close, that Disney would … surpass Netflix in percentage profits?” Said Gordon.
Disney stock is up over 104% since its low in March, while Netflix is up nearly 70%.
“You could counter and say, ‘Well, Disney kept falling,’ but if you look at the breakout of both stocks, they are both about 20% off their highs,” said Gordon. “So, I don’t think it’s either or. They serve two different ones [demographics]. “
Disclosure: Joule Financial owns shares in Disney.
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